Obama Will Vow to Cut the Deficit by $4 Trillion in DNC Speech

We have some excerpts of President Obama’s DNC acceptance speech tonight, and we will hear it from the President’s mouth in just a few hours. In addition to the excerpts, there’s a broad sweep of promises that are listed. And guess which one jumped out at me?

Manufacturing
• Create one million new manufacturing jobs by the end of 2016
• Double exports by the end of 2014

Energy
• Cut net oil imports in half by 2020
• Support 600,000 natural gas jobs by the end of the decade

Education
• Cut the growth of college tuition in half over the next 10 years
• Recruit 100,000 math and science teachers over the next 10 years
• Train two million workers for real jobs at community colleges

National Security
• Invest in the economy with the money we’re no longer spending on war

Deficit
• Reduce the deficit by more than $4 trillion over the next decade

Let’s put the all-fossil fuel energy section, or the rest, aside for a moment.

Now, the national security and the deficit pieces could go hand in hand. By “investing in the economy with the money we’re no longer spending on war,” you can translate that into capping the money spent on war. And because current spending on wars gets factored out ten years into the future for the CBO’s projections, as an accounting matter, that would save roughly $800 billion, I think, at last count. So if you add that to the spending cap already in place, you have $1.8 trillion of this down.

Technically, that would mean only $2.2 trillion to go. But there has always been a “bottomless cup of coffee” quality to the deficit. Just look at Glenn Kessler’s “fact check” today. It doesn’t matter how much you’ve already cut, you always need $4 trillion in deficit reduction.

The platform, you’ll recall, included this prior $1.8 trillion in cuts, and the $1.2 trillion from the trigger cuts, and only made the recommendation to let the Bush tax cuts expire and cap deductions on the rich. Now that would get you over $4 trillion. But I’m just not confident that will end up as the ultimate deal, and I’m particularly not confident that Medicare or Social Security or any programs for the poor are totally safe. And by the way, the spending cap plus the trigger cuts would be DEBILITATING for public investment. Totally debilitating. This idea that we should be proud of investment at its lowest percentage of GDP since Eisenhower is really bogus.

This is all happening with unemployment at 8.3%. That’s the key thing to remember. If you want to say that the deficit is unsustainable, go ahead. I don’t agree, but go ahead. But your words should bear some resemblance to the actual economic situation. There is no magic deficit target disassociated from the economic conditions. Our deficit is what’s keeping us in the economic game right now. And the full energy of the federal government should go toward ending this depression in the lives of millions of people, this waste of human capital that will hamstring them probably forever.

It’s not like Obama has never said this before; he’s been saying it since before his Inauguration Day. But there was some belief that he was moving back to some theme of populism, dedicated to protecting the middle class and preserving the safety net. The proof is in these self-described goals from the President. And it’s not pretty.

Obama Will Vow to Cut the Deficit by $4 Trillion in DNC Speech

We have some excerpts of President Obama’s DNC acceptance speech tonight, and we will hear it from the President’s mouth in just a few hours. In addition to the excerpts, there’s a broad sweep of promises that are listed. And guess which one jumped out at me?

Manufacturing
• Create one million new manufacturing jobs by the end of 2016
• Double exports by the end of 2014

Energy
• Cut net oil imports in half by 2020
• Support 600,000 natural gas jobs by the end of the decade

Education
• Cut the growth of college tuition in half over the next 10 years
• Recruit 100,000 math and science teachers over the next 10 years
• Train two million workers for real jobs at community colleges

National Security
• Invest in the economy with the money we’re no longer spending on war

Deficit
• Reduce the deficit by more than $4 trillion over the next decade

Let’s put the all-fossil fuel energy section, or the rest, aside for a moment.

Now, the national security and the deficit pieces could go hand in hand. By “investing in the economy with the money we’re no longer spending on war,” you can translate that into capping the money spent on war. And because current spending on wars gets factored out ten years into the future for the CBO’s projections, as an accounting matter, that would save roughly $800 billion, I think, at last count. So if you add that to the spending cap already in place, you have $1.8 trillion of this down.

Technically, that would mean only $2.2 trillion to go. But there has always been a “bottomless cup of coffee” quality to the deficit. Just look at Glenn Kessler’s “fact check” today. It doesn’t matter how much you’ve already cut, you always need $4 trillion in deficit reduction.

The platform, you’ll recall, included this prior $1.8 trillion in cuts, and the $1.2 trillion from the trigger cuts, and only made the recommendation to let the Bush tax cuts expire and cap deductions on the rich. Now that would get you over $4 trillion. But I’m just not confident that will end up as the ultimate deal, and I’m particularly not confident that Medicare or Social Security or any programs for the poor are totally safe. And by the way, the spending cap plus the trigger cuts would be DEBILITATING for public investment. Totally debilitating. This idea that we should be proud of investment at its lowest percentage of GDP since Eisenhower is really bogus.

This is all happening with unemployment at 8.3%. That’s the key thing to remember. If you want to say that the deficit is unsustainable, go ahead. I don’t agree, but go ahead. But your words should bear some resemblance to the actual economic situation. There is no magic deficit target disassociated from the economic conditions. Our deficit is what’s keeping us in the economic game right now. And the full energy of the federal government should go toward ending this depression in the lives of millions of people, this waste of human capital that will hamstring them probably forever.

It’s not like Obama has never said this before; he’s been saying it since before his Inauguration Day. But there was some belief that he was moving back to some theme of populism, dedicated to protecting the middle class and preserving the safety net. The proof is in these self-described goals from the President. And it’s not pretty.